Entrepreneurs and Entrepreneurship

2 Learning Objectives  Define entrepreneurship  Describe the historical perspectives of entrepreneurship  Distinguish between entrepreneurship and intrapreneurship  Explain how entrepreneurial ventures differ from small businesses  Explain why entrepreneurship is important  Discuss entrepreneurial activity around the globe  Outline the steps in the entrepreneurial process  Describe who entrepreneurs are and what they do  Discuss the different types of entrepreneurs  Discuss the rewards and challenges of being an entrepreneur

3 What is Entrepreneurship?  Common Themes in Definitions of Entrepreneurship –The role of the entrepreneur –Innovation –Organization creation –Creating value –Profit or Not-for-Profit –Growth –Uniqueness –Process

4 What is Entrepreneurship?  Entrepreneurship –The process whereby an individual or group of individuals use organized efforts to pursue opportunities To create value and grow by fulfilling wants and needs through innovation and uniqueness –regardless of personal resource situation.

5 Historical Perspectives on Entrepreneurship

6 Misconceptions About Entrepreneurship  Five Misconceptions 1.Successful entrepreneurship needs only a great idea 2.Entrepreneurship is easy 3.Entrepreneurship is a risky gamble 4.Entrepreneurship is found only in small businesses 5.Entrepreneurial ventures and small businesses are the same thing

7 Small Business and Entrepreneurial Ventures – The Differences  Small Business –Independently owned, operated, and financed –has fewer than 100 employees –doesn’t engage in new or innovative practices –Has relatively little impact on its industry  Entrepreneurial Ventures –An organization pursuing opportunities –Characterized by innovative practices –Main goals are profitability and growth

8 Current Importance of Entrepreneurship  Three areas of importance 1.Innovation Process of creating, changing, experimenting, transforming, and revolutionizing 2.Number of New Start-ups Important because new firms contribute to economic development through benefits such as product-process innovation 3.Job Creation Vital to the overall long-term economic health of communities, regions, and nations

9 The Impact of Entrepreneurship Globally

10 The Entrepreneurial Process 1. Exploring the Entrepreneurial Context 2. Identifying Opportunities and Possible Competitive Advantage –Opportunities are positive external trends or changes that provide unique and distinct possibilities for innovating and creating value –Competitive advantage is what sets an organization apart; it’s competitive edge 3. Starting the Venture 4. Managing the Venture

11 Types of Entrepreneurs  Novice Entrepreneur –Has no prior business ownership experiences as a business founder, inheritor, or purchaser  Habitual Entrepreneur –Has prior business ownership experience  Nascent Entrepreneur –In the process of starting a new business –Can be either a novice or a habitual entrepreneur

12 Types of Entrepreneurs (cont’d)  Serial Entrepreneur –Has sold or closed an original business and establishes another new business –Continues the cycle of selling/closing and establishing  Portfolio Entrepreneur –Retains an original business and builds a portfolio of additional businesses Through inheriting, establishing, and purchasing the businesses

13 Demographic Profile of Entrepreneurs  Family birth order and gender –Tend to be “first born” and men more likely to start businesses than women  Work experience –Prior entrepreneurial experience positively correlated to being an entrepreneur  Education –Having a high school diploma sharply raises odds of trying to start a business  Entrepreneurial family –Tend to have parents who were entrepreneurial

14 Personality Profile of Entrepreneurs  Personality Characteristics Include: –High level of motivation –Abundance of self-confidence –Ability to be involved for the long term –High energy level –Persistent problem solver –High degree of initiative –Ability to set goals –Moderate risk taker

15 What Entrepreneurs Do 1. Initially, an entrepreneur is engaged in assessing the potential for the entrepreneurial venture, –Then dealing with start-up issues 2. Once the entrepreneurial venture is up and running, –The entrepreneur’s attention switches to managing the venture

16 The Rewards and Challenges of Being an Entrepreneur